Coffee and Cream

question 45

Multiple Choice

Coffee and cream:

• A) are both luxury goods.
• B) are complements.
• C) are both more inelastic in demand in the long run than in the short run.
• D) have a positive cross price elasticity of demand.

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Definitions:

Units

A standard or basic quantity into which an item of supply is divided, issued, or used.

Clothing

Garments and articles worn on the body, typically made from fabric or textiles.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford given their income and the prices of goods and services.

Income

The sum of all a household’s wages, salaries, profits, interest payments, rents, and other forms of earnings in a given period of time. It is a flow measure.